Lenovo revenue dips, job cut brings profit

Lenovo ThinkPad P70
Lenovo today said its ongoing restructuring including job cut delivered $690 million in second half of the year, preserving profit in Q4 2016.

The Chinese technology company’s revenue fell in both Q4 and fiscal 2016. Revenue of Lenovo was $44.9 billion (–3 percent) in fiscal 2016 and $9.1 billion in Q4 (–19 percent). Lenovo has reported Q4 net income of $180 million (+80 percent) and net loss of $128 million in fiscal 2015-16.

Lenovo generated revenues of $2.3 billion from China, $1.6 billion from Asia Pacific, $2.5 billion from Europe / Middle East / Africa (EMEA) and $2.7 billion Americas in Q4.

Lenovo strengthened its core PC business, enhanced cost structure and protected its profit, despite facing internal and external challenges that impacted revenue.

Yang Yuanqing, chairman and CEO of Lenovo, said: “Facing the operational issues in the businesses, we have already taken a number of proactive actions, including making key decisions in organization, leadership, products and channels to get back to growth in mobile, and adopting a new multi-business operating system.”

Lenovo achieved double digit growth in mobile business — including Motorola business — in emerging markets – 96 percent in Asia Pacific, 83 percent in EMEA and 46 percent in Latin America.

Lenovo generated $6.2 billion revenue from the PC Group. Lenovo shipped 12.1 million PCs in the fourth quarter for a market share of 20.2 percent in Q4 and 21 percent in fiscal 2016. Lenovo tied with Apple for #1 in the expanded PC market, which includes traditional PCs, detachables and slate tablets, in Q4.

Lenovo’s Mobile Business Group revenue was $1.7 billion. Lenovo shipped 10.9 million smartphone shipments in Q4 and 66.1 million in the full year.

In tablets, Lenovo outpaced the market and continued to grow with nearly 11 million units shipped, and 5.4 percent market share. Motorola contributed nearly 5 million units in the quarter to Lenovo’s total, while adding $1 billion to Lenovo’s MBG revenues.

Lenovo’s Enterprise Business Group sales were $4.6 billion (+73 percent) driven by hyperscale wins in China in the full year, while quarterly revenue fell 8 percent to $1 billion, primarily as a result of a sales force model that was not fully aligned to maximize opportunities for the company.

Baburajan K